Asian shares were mixed on Tuesday while precious metals pulled back from record highs, as investors weighed interest rate cut hopes against profit-taking. The MSCI Asia-Pacific index edged up 0.4%, led by South Korea’s Kospi which rose 2.2% and is on course for its best year since 1999. European stocks briefly touched a new intra-day record on the Stoxx 600, while the FTSE 100 was flat.
Gold fell 1.6% to $4,460 an ounce after repeated record highs this year, but remains on track for its biggest annual gain since 1979 at over 70%. Silver jumped above $80 an ounce for the first time before dropping 4.8% to $75.35 in volatile trading. Analysts attributed the rally to US interest rate cut expectations and hedging against geopolitical uncertainty.
Oil prices rose 2% following weekend talks between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy in Florida. Trump said a deal to end the war in Ukraine is “closer than ever” but acknowledged unresolved thorny issues over the Donbas region. Brent crude climbed to $61.8 a barrel and New York crude to $57.88.
Wall Street stocks drifted lower as the technology rally faltered, with the S&P 500 retreating from recent highs. Markets are pricing in two further quarter-point rate cuts by the US Federal Reserve by September, after the Fed cut its main rate to 3.5%-3.75% this month. Minutes of the last meeting are due Wednesday.
“The big picture for precious metals still looks structurally supportive with easier rates ahead, persistent fiscal and geopolitical unease,” said Charu Chanana of Saxo Bank, adding that pullbacks may be seen as buying opportunities for long-term investors. Hedge fund manager Becky Qin of Fidelity International noted that the Fed has room to cut, supporting a strong backdrop for risk assets.
